Weinstock's empire faces final disaster
FIRST, Marconi. Then BAE Systems. Now French engineering giant Alstom, the third major pillar in the once mighty engineering empire of the late Lord Weinstock, is about to stumble.
The latest disaster to shatter Weinstock's proud GEC legacy is the suspension of the shares in Alstom.
The company, formed out of the GEC-Alstom joint venture with Alcatel, is only days away from bankruptcy.
Unless the French government comes in with a rescue plan - and cash injections are being opposed by the EU competitions commissioner - more than 100,000 workers face a bleak future. These include 10,000 British workers involved in making turbines and trains.
When Weinstock retired from GEC, its shares were standing at 600p, a twelvefold increase over 20 years.
In a terrible contrast, Alstom shares over five years have slumped from 31.97 euros (£22.22) at today's conversion rate to just 3.1 euros (£2.16).
The Alstom catastrophe is the latest in a series of management bungles that have seen Weinstock's legacy turn to dust. Marconi, which changed its name from GEC after the break-up of the company in 1999 and then dashed headlong towards disaster in the telecoms bubble, was the most graphic example of a mistaken industrial policy.
From a high of £12.24 on September 5, 2000, its shares have collapsed. They stood at just 80p last week.
Before he died last year and having seen the Marconi disaster, Weinstock said of senior management: 'I would like to string them up from a high tree and let them swing there for a long time.'
The third great destruction of the value in Weinstock's legacy is BAE Systems, which took over the GEC defence interests.
BAE says that the contracts it inherited for nuclear submarines and the Nimrod spy planes have cost it more than £600 million.
There is still time to turn round the BAE Systems defence business, but its shares have fallen over the past five years from a high of 480p to only 181 1/4 p.
